Albania’s Lack of Land Infrastructure Creates Thriving Market for Satellite

[Satellite News 04-15-11] Albania’s communist past has left the Eastern European country of 3 million people with very little terrestrial infrastructure, making it a healthy market for satellite TV and communications. Albanian Satellite Pay-TV service provider DigitAlb and regional broadband provider Starsat are two companies that are looking to use satellite to rebuild the nation into a modern, developed economy.
DigitAlb CEO Alban Jaho told Satellite News that the company is looking to expand its presence in neighboring regions after securing additional capacity this year from Eutelsat. Jaho believes the Eutelsat capacity can help his company achieve a 15 percent growth rate this year. “We estimate that our market consists of at least 1.2 million potential subscribers, and our target is to get an additional 850,000 from Albania, Kosovo and parts of Macedonia. We have expanded our footprint in Kosovo through a cable operator and we are looking forward to expand it also throughout Macedonia.”
DigitAlb has tried to take a progressive growth stance by developing new HD offerings, including the launch of two HD channels back in 2007. Jaho said that these efforts, however, have really only taken off in the last few months. “We now broadcast eight HD channels, therefore turning into the most advanced and unique platform in our region. We have to note we are subsidizing this service through the cost of HD set-top box and content. Continuing our strategy, we have decided to offer 12 HD channels by 2012. It will cover all kinds of channels.”
DigitAlb’s HD service could be profitable by the end of 2011, according to Jaho, which is why the provider is taking an aggressive short-term stance to the services’ development. “In general, services such as the basic, premium, PPV, PVOD and HD offerings will try to reach certain segments of the market and they will help each other to be profitable, even though our goal aims for each one of them to be profitable.”
While Eutelsat’s capacity will help DigitAlb launch its short-term growth efforts, Jaho said the company would need more satellite capacity to meet its long-term goals. “First, we will try to use more space by broadcasting more channels in MPEG4, creating more bandwidth for broadcasting other channels. Our satellite business is a core one and we will continue to develop it in the future. We will make a estimation in 2012 and see what will be our need for satellite capacity.”
Similar to DigitAlb’s strategy in the broadcast sector, Albanian broadband provider Starsat’s focus is to bring the benefits of satellite data services to rural parts of Albania where there is no terrestrial infrastructure. The company, which works alongside SES Astra and Newtec, is playing a key role in connecting rural communities and schools.
Starsat CEO Dritan Vreshta told Satellite News that Albania’s existing government has been focused on making telecommunications and the Internet widely available for its citizens. “In 2009, there was a project to deliver broadband Internet to schools. We have started to deliver Internet to every school. At the time, only 600 out of 2,000 schools in Albania could be connected. Now they are all able to receive service,” he said.
Starsat also started working on a project last summer to make Albania’s postal system more efficient, partnering with Albania’s incumbent post provider Albania Post. “They decided to have Internet in all their post offices all around Albania. While 220 offices were in urban areas, 300 are located in places where there was no terrestrial infrastructure. We have now 300 post offices up and running with 400 Mbps download and 256 Mbps upload. At the time of implementing the project, it was considered attractive for many postal operators around the world. We are promoting this as a case study to post office companies around the world,” he said.
Despite progress being made in connecting different parts of Albanian society, the cost of hardware for implementing satellite projects remains a challenge for Vreshta. While costs have been coming down, projects still require significant capital investment. “It is still expensive to buy the hardware. But this is coming down as technology from companies like Newtec have a self-install element. We have clients that can install it themselves. This is a very good option.”
Because of Albania’s long history of higher hardware costs, Vreshta said that Starsat has had to take on the task of educating the public and government agencies of the industry’s changing dynamics and technology, which he believes are critical to the country’s developing economy.
“Many people in Albania still believe satellite solutions are not as viable. It is totally different when you go to the Middle East and Africa, where people are much more aware of satellite. We are actively educating European government agencies about the performance of satellite and are telling them that it exists with attractive costs,” he said. “Satellite is very important to Albania’s future. The main angle we have to focus on is Albania as a post-communist society that has a lot of problems in terms of the development of terrestrial infrastructure. We have inherited nothing from the previous government. We have no cable in most of the rural areas and lack of terrestrial infrastructure has led to satellite communications being a must.”